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David Board's avatar

I wonder if one reason some of the public associates higher interest rates with higher inflation is because when high inflation is in the news discussion of rising interest rates is also in the news, so people make that association but end up getting the causal link backwards.

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EK1949's avatar

My view is that the rate hikes don't lead. I side with the public when it treats high costs from real economy shortages as no different from the high costs of borrowing. Maybe raising one cost doesn't lower another. It just doubles the pain.

The only way rate hikes can significantly lower prices is by crashing the economy and bleeding jobs.

We'd be better off letting inflation subside as supply repairs itself. The leeches aren't helping.

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